Warner Music Group said on Wednesday any takeover offer it might make for Britain's EMI Group would probably be all cash.
The U.S. group said its statement was to clarify that its shareholders would not be required to notify their interests in Warner Music under British takeover rules.
Warner Music, the world's fourth-largest music company and home to Madonna and Red Hot Chili Peppers, said on Tuesday it had approached EMI about a possible bid and that it had the support of Impala, the trade group for independent music labels which has previously challenged consolidation in the industry.
The approach is the latest twist in a seven-year battle in which EMI, the world's third-biggest music group, and Warner Music have each tried to buy the other.
Both groups are struggling with a decline in physical music sales as digital downloads gain hold and have also suffered from their artists producing fewer hits. A tie-up would give both sides access to more music and the ability to cut costs.
Analysts believe any bid for EMI, which has issued two profit warnings this year, is likely to be pitched around 260 pence a share. Warner offered 320p a share for EMI last year. The shares closed at 240 pence on Tuesday, valuing the home of Robbie Williams and Coldplay at about 1.9 billion pounds ($3.71 billion).
But analysts also warn that any fresh offer could run into the same regulatory problems that have hindered previous bids.
EMI and Warner Music first tried to merge in 2000 and again in 2003. Last year, they were locked in a $4.6 billion battle to buy each other, but hopes of a deal were quashed in June when a European court annulled approval of the 2004 merger of Sony's Sony Music and Bertelsmann's BMG.
That ruling cast doubt on whether EMI and Warner Music would get regulatory clearance, and the companies abandoned talks until there was more clarity from antitrust regulators.
The European Commission is now examining the refiled Sony-BMG bid, which would create the world's number two music company, with a deadline of March 1, and it is then expected to open a further investigation that would last 90 working days.